## Facts

- David K. Pang was an attorney employed as in-house counsel for International Document Services and related entities.
- During his employment, Pang concluded the company’s business practices violated other states’ usury laws by charging interest above statutory limits and operating without required registration as a lending institution in some jurisdictions.
- Pang reported his concerns to company owners and warned them about legal exposure tied to the interest-rate practices.
- About six months into the job, Pang took home certain loan contracts, prepared a spreadsheet summarizing what he believed were multiple usury-law violations, and shared the spreadsheet with the owners.
- Roughly two weeks after sharing the spreadsheet, the company terminated Pang, citing his removal of documents as a violation of the employee handbook.
- Pang alleged the stated reason was pretextual and that he was fired because management feared he would reveal unlawful conduct and because he resisted pressure to ignore noncompliance, which he claimed implicated his duties under the Utah Rules of Professional Conduct.
- Pang sued in Utah district court for wrongful termination in violation of public policy, arguing that Utah Rule of Professional Conduct 1.13(b) (duties of an organizational lawyer when learning of conduct likely to cause substantial injury to the organization) supplied the needed public-policy basis for a claim by an at-will in-house attorney.
- The district court granted the defendants’ Rule 12(b)(6) motion to dismiss for failure to state a claim and denied Pang’s request for oral argument on the motion.
- Pang appealed to the Utah Supreme Court.

## Issues

1. Whether Utah Rule of Professional Conduct 1.13(b) reflects a clear and substantial Utah public policy sufficient to support a common-law wrongful termination claim by an at-will in-house attorney.
2. Whether the district court’s refusal to hold a requested hearing on the defendants’ dispositive motion required reversal.

## Decision

- The Utah Supreme Court affirmed dismissal of Pang’s complaint for failure to state a claim.
- The court held that Rule 1.13(b) does not constitute a clear and substantial public policy that limits an employer’s ability to terminate an at-will employee, including in-house counsel.
- The court also reasoned that other ethics rules express strong policy choices favoring a client’s ability to end the attorney-client relationship at any time, which weighs against treating Rule 1.13(b) as a job-protection mandate.
- The court held the district court erred in denying Pang’s request for a hearing on the motion to dismiss, because hearings on dispositive motions generally must be granted when requested.
- The hearing error was harmless because Pang did not show that oral argument would have changed the outcome.
- The court noted that a Rule 12(b)(6) dismissal is generally not a decision on the merits and that nothing in its ruling prevented Pang from filing a new complaint.

## Legal Principles

- Utah’s public-policy exception to at-will employment is narrow; a plaintiff must identify a clear and substantial public policy that would be defeated by the termination.
- The Utah Rules of Professional Conduct primarily guide attorney conduct and discipline; they are not designed to create substantive rights or broad employment protections.
- Rule 1.13(b), standing alone, does not supply the type of clear and substantial public policy needed to support a wrongful discharge claim by an at-will employee.
- Professional-conduct rules also reflect policy choices favoring client control over representation, including the ability to discharge counsel, which counsels against treating an ethics rule as a restriction on termination of in-house counsel.
- A trial court’s failure to hold a requested hearing on a dispositive motion can be error, but it does not warrant reversal absent prejudice (i.e., a showing that the error affected the result).

## Conclusion

In *Pang v. International Document Services*, the Utah Supreme Court affirmed dismissal of an at-will in-house attorney’s public-policy wrongful termination claim, holding that Rule of Professional Conduct 1.13(b) is not a clear and substantial public policy limiting termination and that, although the trial court should have granted a requested hearing on the motion to dismiss, the denial was harmless because it did not affect the outcome.


Pang v. International Document Services, 356 P.3d 1190 (2015)